SP Setia still bullish on growth in Malaysia

SP SETIA Bhd, the country's biggest property developer, says its target of RM2 billion sales this year will be driven mainly by projects on the home front.

"About RM1.9 billion will come from Malaysia and the remaining RM100 million from Vietnam," SP Setia president and chief executive officer Tan Sri Liew Kee Sin said yesterday in Kuala Lumpur.

He was speaking at a corporate luncheon on the property sector, organised by Malaysian Industrial Development Finance Bhd.

The group has already achieved RM608 million sales in its first quarter ended January 31 2010.
On average, SP Setia's annual sales of nearly RM1.2 billion come from residential projects in the country.

Some of its key developments in the Klang Valley are Setia Alam and Eco Park, which saw sales of RM238 million and RM197 million respectively in the first four months of the financial year ending October 31 2010.

Liew said that SP Setia's sales represent less than 5 per cent of the total market and he hopes to increase this share by ensuring that the group maintains its sales growth of 20 per cent a year.

He foresees the Malaysian property market being resilient despite an expected normalisation of interest rates in the next one to two years.

"Malaysia will still present growth opportunities for us for the next five years. In five years, we will be able to grow in China and Vietnam after the initial learning costs," he said.

The developer has invested some US$12 million (RM39 million) for land title rights in Vietnam and allocated US$30 million (RM99 million) for its developments in China.

While remaining focused on its projects in the Klang Valley, Johor and Penang, SP Setia also sees potential in Sabah from the Sabah Development Corridor.

In addition, the developer is hoping to launch its key catalyst, the KL Eco City development, in October. It will begin pre-launch marketing in three months.

The "green" mixed development is located opposite the Mid Valley Megamall and is a joint venture with the Kuala Lumpur City Hall (DBKL), which owns the 9.7ha leasehold land in the Kampung Haji Abdullah Hukum area.

"We will address infrastructure concerns such as traffic flow. More details will be provided in time to come," said Liew, who declined to comment further.

By Business Times (by Jeeva Arulampalam)